18.3 Decision processes, stakeholder objectives and scale

A portfolio of actions is available for reducing the risks of climate change, within which each option requires evaluation of its individual and collective merits. Decision-makers at all levels need to decide on appropriate near-term actions in the face of the many long-term uncertainties and competing pressures, goals and market signals. Section 18.1 identified four types of inter-relationships between adaptation and mitigation. Investments in mitigation may have consequences for adaptation; and investments in adaptation may have consequences for the emission of greenhouse gases. At the highest level of aggregation, adaptation and mitigation are both policy substitutes and policy complements, and may compete for finite resources. However, this need not be the case: both adaptation and mitigation may be considered in a policy process without invoking trade-offs, often in the context of broader considerations of sustainable development. This section introduces the nature of the decision problem followed by a review of stakeholder objectives, risk and scales.

18.3.1 The nature of the decision problem

It is difficult, and perhaps counterproductive, to explore the pay-offs from various types of investments without a conceptual framework for thinking about their interactions. Decision analysis provides one such framework (Raiffa, 1968; Keeney and Raiffa, 1976) that allows for the systematic evaluation of near-term options in light of the careful consideration of the potential consequences (see Lempert et al., 2004; IPCC, 2007; Keller et al., 2007; Nicholls et al., 2007; Chapter 20). The next several decades will require a series of decisions on how best to reduce the risks from climate change. There will be, no doubt, opportunities for learning and mid-course corrections. The immediate challenge facing policy-makers is to find out which actions are currently appropriate and likely to be robust in the face of the many long-term uncertainties.

The climate-policy decision tree can be represented as points at which decisions are made, and the reduction of uncertainty in the outcomes (if any) in a wide range of possible decisions and outcomes. The first decision node represents some of today’s investment options. How much should we invest in mitigation, how much in adaptation? How much should be invested in research? Once we act, we have an opportunity to learn and make mid-course corrections. The outcomes include types of learning that will occur between now and the next set of decisions. The outcomes are uncertain; the uncertainty may not be resolved but there will be new information which may influence future actions. Hence the expression: “act, then learn, and then act again” (Manne and Richels, 1992).

The ‘act, then learn, then act again’ framework is used here solely to lay out the elements of the decision problem and not as an alternative to the many analytical approaches discussed in this Report. Indeed, it can be used to parse various approaches for descriptive purposes, such as deterministic versus probabilistic approaches and cost-effectiveness analysis versus cost-benefit analysis. Decision analysis has been more widely applied to mitigation than to adaptation, although a robust decision framework is suitable for analysing the array of future vulnerabilities to climate change (Lempert and Schlesinger, 2000; Lempert et al., 2004).